Min­ing, farm­ing are the an­swer to In­dia’s poverty: Anil Agar­wal

IN­TER­VIEW WITH ANIL AGAR­WAL, CHAIR­MAN, VEDANTA RE­SOURCES

Resource Digest - - CONTENT -

The min­ing sec­tor has the po­ten­tial to cre­ate hun­dreds of thou­sands of jobs in the coun­try’s poor­est and re­motest ar­eas, says Anil Agar­wal, chair­man of Vedanta Re­sources, the Lon­don-head­quar­tered min­ing and met­als con­glom­er­ate. The sec­tor will grow swiftly, he says, if all re­sources are brought un­der one min­istry. Edited ex­cerpts:

IN­DIA’S GE­O­LOG­I­CAL FOR­MA­TION IS AMONG THE RICH­EST IN THE WORLD. HOW­EVER, UN­LIKE AUS­TRALIA, IN­DIA HAS NOT BEEN ABLE TO EX­PAND ITS MIN­ER­ALS RE­SOURCE AND RE­SERVE (R&R) BASE FAST ENOUGH. AND, MIN­ER­ALS PRO­DUC­TION IN GEN­ERAL RE­MAINS FLAT. WHAT IS NEEDED TO GIVE A PUSH TO THE SEC­TOR?

What dis­ap­points is that the share of min­ing in the coun­try’s gross do­mes­tic prod­uct (GDP) is a lit­tle over one per cent. In fact, the sec­tor’s con­tri­bu­tion to GDP has fallen in the past decade, in the face of grow­ing do­mes­tic de­mand for min­er­als. A Mckin­sey re­port says min­ing has the po­ten­tial to cre­ate six mil­lion new jobs and con­trib­ute an ad­di­tional $47 bil­lion to GDP by 2025. Re­mem­ber, min­ing jobs get cre­ated in the most back­ward dis­tricts of In­dia’s poor­est states. I strongly be­lieve that in min­ing and farm­ing are to be found the an­swer to the coun­try’s poverty. Sci­en­tific prospect­ing and ex­plo­ration will let us know the re­sources be­neath the earth.

ARE YOU SEE­ING SIGNS OF A BREAK­THROUGH IN MIN­ER­ALS EX­PLO­RATION?

I think the new na­tional min­eral ex­plo­ration pol­icy al­low­ing do­mes­tic and for­eign pri­vate par­tic­i­pa­tion in ex­plo­ration and pro­duc­tion through com­pet­i­tive bids will be a game changer. The Mckin­sey re­port is an eye-opener to how poorly In­dia stands in com­par­i­son with lead­ing min­ing coun­tries in base­line geo­phys­i­cal and geo­chem­i­cal data gen­er­a­tion and in­vest­ment per sq km of ex­plo­ration. Re­mem­ber, the life cy­cle of min­ing and oil & gas pro­duc­tion be­gins with ex­plo­ration, where Delhi has now opened a win­dow of op­por­tu­ni­ties to the world’s lead­ing agen­cies.

I don’t see a logic as to why our pro­duc­tion of iron ore should be only 155 mil­lion tonnes (mt, in a year) against

Aus­tralia’s 700 mt. Sim­i­larly, even while China mostly re­lied on baux­ite im­ports, it man­aged to pro­duce over 31 mt of pri­mary alu­minium in 2015; our pro­duc­tion, in spite of our own­ing high qual­ity baux­ite de­posits in large quan­ti­ties, was only about 2.4 mt. It’s uned­i­fy­ing that im­ports ac­count for half our coun­try’s alu­minium con­sump­tion when much of our nearly 4.2 mt smelt­ing ca­pac­ity is idle. In steel, too, In­dia man­aged to pro­duce only 90 mt in 2015, com­pared to China’s 804 mt. To make half the global pro­duc­tion of 1.6 bil­lion tonnes, China had to im­port 952 mt of iron ore last year, ac­count­ing for over two-thirds of the global seaborne trade in the min­eral.

Un­like China, we have the ad­van­tage of a plen­ti­ful re­serve of good to medium grades of ore. Who says we are over­am­bi­tious in tar­get­ing steel ca­pac­ity of 300 mt and alu­minium smelt­ing ca­pac­ity of 20 mt? In­dia will need ev­ery ounce of that alu­minium and steel to sup­port growth and in­fra­struc­ture de­vel­op­ment.

WHAT ARE NOW THE PRIN­CI­PAL CHAL­LENGES BE­FORE OUR MIN­ING GROUPS?

The world now has tech­nol­ogy which makes the whole chain from ex­plo­ration to min­ing of min­er­als much more en­vi­ron­ment friendly, sus­tain­able and pre­dictable than ever in the past. But, that tech­nol­ogy, such as un­der­ground min­ing, is ex­pen­sive and has to be im­ported. At Hin­dus­tan Zinc (HZL), we are get­ting ready to do un­der­ground shaft min­ing at the Sin­de­sar Khurd and Ram­pura Agucha re­serves in Ra­jasthan. We are get­ting the tech­nol­ogy from South Africa. Once the projects are com­mis­sioned, our mines' pro­duc­tiv­ity will sig­nif­i­cantly im­prove and costs will be down.

The In­dian min­ing sec­tor is not seen as par­tic­u­larly com­mu­nity-friendly and en­vi­ron­ment-friendly. Re­sis­tance from lo­cals and non-gov­ern­ment bod­ies leads to in­def­i­nite post­pone­ment or aban­don­ment of min­ing projects.

A min­ing group must re­main con­scious about its so­cial obli­ga­tion. That in­cludes tak­ing care of re­set­tle­ment and re­ha­bil­i­ta­tion of the lo­cals re­quired to va­cate sites, and of the en­vi­ron­ment. I want Vedanta to be in the fore­front of en­vi­ron­men­tal re­search and de­vel­op­ment, lead­ing to sat­is­fy­ing the lo­cal com­mu­nity in terms of wa­ter, air and soil. The is­sues re­lat­ing to land, cul­ture, re­li­gion and so­cial ex­pec­ta­tions of tribal and indige­nous com­mu­ni­ties are com­plex and unique to these places. They are to be ad­dressed care­fully for us to be able to cre­ate an ideal en­vi­ron­ment for min­ing. Pol­icy sup­port from the gov­ern­ment will be more read­ily avail­able if the prime min­is­ter brings all the re­sources un­der one min­istry. VEDANTA’S GROWTH HERE HAS BEEN BY WAY OF AC­QUI­SI­TIONS. Yes, we ac­quired Bharat Alu­minium Com­pany (Balco) and HZL in the early 2000s. More re­cently, we bought ma­jor­ity stakes in Sesa Goa and Cairn In­dia. But, Vedanta has also in­vested over Rs 50,000 crore in Odisha to build the coun­try’s largest sin­gle­site alu­minium smelter and a very large, coal-fired power com­plex. Our ac­qui­si­tion of Balco and HZL has been fol­lowed by big smelt­ing, min­ing and power ca­pac­ity ex­pan­sion. You have to con­cede that we are good in both build­ing new projects and ex­pand­ing ex­ist­ing ones.

THE WORLD NOW HAS TECH­NOL­OGY WHICH MAKES THE WHOLE CHAIN FROM EX­PLO­RATION TO MIN­ING OF MIN­ER­ALS MUCH MORE EN­VI­RON­MENT-FRIENDLY, SUS­TAIN­ABLE AND PRE­DICTABLE THAN EVER IN THE PAST

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